Since July 2021, 137 countries (accounting for more than 90% of the global economy) have signed a deal aimed at ensuring companies pay a global minimum tax rate of 15%. The Organization for Economic Co-operation and Development (OECD), estimates the minimum tax will generate $150 billion in additional global tax revenues annually.
The idea behind the new system is that it will benefit countries where a company’s products and services are sold, not only the countries where the products or services are provided. This is a response to the trend toward companies migrating income from intangible sources (such as digital services or intellectual property royalties) to low tax jurisdictions to avoid paying a higher tax rate in their “home” countries.
While the proposed global minimum tax, which is now expected to be implemented in 2024, seems like a good idea for countries that have lost out on revenue collections from low tax arrangements, many developing countries (including South Africa and African countries) are likely to have to give up any potential digital services taxes for limited potential benefit. This may explain why only 23 African countries have signed the deal to date.
Join Graphene Economics, a specialist African transfer pricing advisory firm, and the GIBS Centre for African Management and Markets (CAMM) as they discuss the potential outcomes and practical implications of the global minimum tax and proposed new taxing rights for multinationals, revenue authorities, and African economies.
Date: 23 August 2022
Time: 08h00 - 10h00 Venue: GIBS Campus
Address: 26 Melville Road, Illovo Cost: R270
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